NCC’s Norwegian construction and civil engineering operations, which account for just over 11 percent of NCC’s sales, have demonstrated poor profitability for a number of years. As of January 1, 2016, NCC’s construction and civil engineering operations have been reorganized into two Nordic business areas: NCC Building and NCC Infrastructure. The management teams of the new business areas have now analyzed the Norwegian parts of the operations, which has resulted in the recognition of impairment losses for projects in the third quarter. The operating result for these business areas is thereby estimated to stand at close to zero in the quarter.

Inadequate project management is the underlying reason for the impairment losses, which largely relate to completed and delivered projects. Within the scope of the new business area structure, NCC has allocated resources to strengthen project management activities in Norway.

“I can say that our turnaround in Norway is taking longer than expected, but we now have the right organization and processes in place. We have also allocated resources to improve project management in Norway. In addition, we are also currently reviewing the Group’s overhead costs. However, orders received and the market outlook were some of the bright spots in the quarter. Orders received for NCC increased by 25 percent in the third quarter compared with the year-earlier period,” says Peter Wågström, President and CEO of NCC.